Lessons Learned from the Mexican Energy Forum

Updated on Jul 29, 2016

Honeywell recently helped sponsor the Mexican Energy Forum, which provided high-level government officials and senior leaders an opportunity to start a dialogue and develop a partnership that will support solutions for Mexico’s changing energy landscape.

Craig Breese, president, Honeywell Mexico and Latin America, presented the keynote speech: “Mexico's Downstream Sector Challenges.” He discussed the global and local challenges for Downstream-Refining new projects, investment opportunities and the current industry trends.

“Honeywell's 80-year history in Mexican oil and gas and petrochemical, provides a unique advantage for the industry,” said Breese. “The open market situation will bring great opportunities for the energy sector in Mexico.”

There are two major disruptions happening in the global energy sector that are impacting Mexico. The first is the sustained volatility of oil prices. The second is the industrial internet of things (IIoT).

Low and volatile oil prices have impacted the sector’s supply chain in a number of ways. They have constrained capital expenditures, which is hitting everyone but low-cost producers that are taking advantage of the opportunity to increase market share. They have also created low feedstock costs, benefiting downstream customers. Finally, they have put pressure to reduce operating expenses, creating a unique opportunity for companies like Honeywell to explore new business models such as outcome-based services.

IIoT’s disruptive effect can be found in how industrial businesses are investing in leveraging technologies that improve productivity and reliability—such as cloud and data technologies. A recent survey of North American manufacturing executives suggests that while investments in data analytics are rising, companies are still grappling to better understand its benefits.

As these challenges impact Mexico, a new dynamic is emerging that the country must contend with: energy reform. There are new, daily developments in the country’s national oil business Pemex, which combined with new private sector players, are rapidly reshaping the Mexican energy sector.

Anthony Corridore, vice president of marketing and strategy, Honeywell Process Solutions (HPS), highlighted how the delay in the implementation of the Energy Reform influenced the industry but inevitability set an important foundation for significant change.

“It is impossible to be sure exactly how all this will play out, but we can be certain about two things,” said Corridore. “First, all these disrupters present massive potential for change and opportunities in the Mexican energy sector. Second, you need both a strong commitment and presence in Mexico if you want to grasp those opportunities.”

On IIoT, Corridore said, “Change will come from IIoT, but as an evolution, rather than a revolution. There is perhaps still more hype than substance around the topic, but it is a real chance to transform industrial businesses. Where businesses and their partners can leverage the right technologies, IIoT will have a significant impact on operations and profitability, both today and in the future.”

Other speakers included Andres Piñero, sales director, HPS, who reaffirmed Honeywell’s commitment to local support and Gabriel Sanchez, director, new ventures, HPS, who discussed Mexico's Midstream sector, as well as the opportunities provided with new infrastructure projects, liquefied natural gas projects and overall development potential.

Honeywell first began operations in Mexico City in 1947. Today, Honeywell operates strategic business groups in 15 facilities and five offices located in Baja California, Chihuahua, Nuevo Leon, San Luis Potosi and Mexico City.